While discussing how to protect yourself against trade fraud, one of our clients said: “I prefer dealing with an HK company, it’s safer, at least.” However, among all frauds I’ve heard about, half of the victims sent money to an HK account.
Safe or not depends on what kind of HK company it is. Typically speaking, a traditional HK company is set up by business people who base their company mainly in HK. However, because virtual offices are permitted for a HK company and little capital is needed to incorporate an HK company, there are two kinds of HK companies.
The first type of HK company is set up by business people in other jurisdictions, for the benefit of convenience, such as free flow of funds or nearly unlimited business activities. For example, many factories in Mainland China set up an HK company to do international trade. However, another situation is an HK company set up by fraud, the only purpose of the ‘so-called’ “ HK company” is to scam!
Dealing with an HK company is not a guarantee. If you are dealing with a HK company, you may pay a visit to its office, or pay someone to do so. Don’t make a full payment until the goods are to your satisfaction. These are useful ways to effectively protect yourself.